December 10, 2007
DONNA MCGOVERN AND JOSEPH WOZNIAK, PLAINTIFFS-RESPONDENTS,
MICHAEL QUINTELA, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Hudson County, Docket No. DC-009347-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 14, 2007
Before Judges Skillman and Yannotti.
Defendant Michael Quintela appeals from an order entered on September 22, 2006, which denied defendant's motion to vacate a final judgment by default entered in favor of plaintiffs Donna McGovern and Joseph Wozniak on August 11, 2006. For the reasons that follow, we reverse.
On April 10, 2006, plaintiffs filed a complaint against defendant in the Special Civil Part asserting claims under N.J.S.A. 2A:42-10.10, which provides, among other things, that a landlord may not institute an action against a tenant for possession of leased premises as a reprisal for efforts by the tenant to enforce any right under the lease or under state or federal law. According to the complaint, on January 4, 2006, Ms. McGovern brought an action in the municipal court in which she asserted that defendant had committed various violations of local and state building codes that "involved health and safety issues" for plaintiffs and others who reside in defendant's building.
Plaintiffs alleged that, as a result of the commencement of the municipal court action, defendant retaliated by filing a landlord/tenant action seeking their eviction from the premises for non-payment of rent. The action was dismissed when plaintiffs deposited with the court sufficient funds to pay the rent for January, February and March 2006.
Plaintiffs further alleged that on February 9, 2006, defendant's attorney served upon them a notice to cease which stated that plaintiffs were habitually late in paying rent and that Mr. Wozniak was an "unauthorized occupant" of the premises.
On March 15, 2006, defendant filed another landlord/tenant action seeking to remove plaintiffs from the premises.
Plaintiffs demanded a declaratory judgment dismissing the then-pending landlord/tenant action; an injunction requiring defendant to recognize and accept Mr. Wozniak as a residential tenant; monetary damages and costs incurred by plaintiffs in pursuing this action, including their attorney's fees; and such other relief as the court may deem just and equitable.
Plaintiffs also filed a motion to transfer the landlord/tenant action to the regular civil calendar of the Special Civil Part. The motion was granted by order dated May 1, 2006. Thereafter, defendant dismissed the landlord/tenant action because a notice to quit had never been issued to plaintiffs.
On June 21, 2006, Christopher Hanlon, counsel for defendant in this case, submitted an answer to plaintiffs' complaint to the clerk for filing. However, on June 27, 2006, the clerk's office returned the answer to Mr. Hanlon with a letter stating that it had not been filed within the time required by Rule 6:3-1. The letter also stated that the case had been in default as of June 19, 2006, and a motion or consent order was required to file the answer. On August 1, 2006, Mr. Hanlon served interrogatories upon plaintiffs' attorney.
The trial judge conducted a proof hearing in the matter on August 11, 2006, at which plaintiffs both testified in support of their claims. Plaintiffs' attorney also submitted a certification which stated that his fees and costs totaled $5,112.50. The judge asked whether the complaint had been served upon defendant personally, and plaintiffs' attorney stated that the complaint was served upon Leonard P. Kiczek, the attorney who represented defendant in the landlord/tenant matters.
Plaintiffs' counsel also stated that Mr. Hanlon had contacted him on June 7, and counsel sent Mr. Hanlon a complete copy of the file including plaintiffs' discovery request. Plaintiffs' counsel added, "From neither attorney nor from [defendant] personally has a timely answer ever been filed." Counsel did not mention the answer that had been submitted to the court for filing on June 21 and returned by the clerk, nor did he mention defendant's demand for discovery. The judge asked whether defendant or his attorneys had been notified of the proof hearing, and plaintiffs' counsel stated that he did not provide "specific notice" of the hearing.
The judge determined that it was appropriate to enter a default judgment based on the proofs presented at the hearing. The judge found that defendant's attempts to remove plaintiffs from the premises were in reprisal for the municipal court actions commenced by Ms. McGovern. The judge concluded that plaintiffs were entitled to monetary damages in the amount of $5,112.50. According to a certification filed by plaintiffs' counsel, this was the amount of counsel fees incurred in connection with defendant's notice to cease, the second landlord/tenant action, and this case. The judge reviewed the certification submitted by plaintiff's counsel and stated that counsel's hourly rate and the time devoted by counsel to the matters were reasonable.
The judge entered a final judgment on August 11, 2006, awarding plaintiffs $5,112.50, plus court costs for this matter in the amount of $56. The order further provides that Mr. Wozniak was a residential tenant in defendant's building and he was entitled to reside there "without interference to his right to quiet enjoyment by [defendant], or any successor landlord." The order additionally states that defendant's notice to cease dated February 9, 2006 "shall be of no further effect and may not be used in connection with any future" action to evict plaintiffs from the premises.
Defendant thereafter filed a motion to vacate the default judgment. In a certification submitted in support of the motion, Mr. Hanlon stated that after defendant provided him with a copy of the complaint, it was unclear to him when the answer was due.
He spoke with plaintiffs' attorney and learned that the answer was due on June 19. However, Mr. Hanlon incorrectly recorded the due date for the answer. As stated previously, Mr. Hanlon submitted the answer to the court for filing on June 21.
Mr. Hanlon said that on June 28, he received notice that the clerk had rejected the answer, but he misfiled the documents and did not diary the matter for a follow-up. Mr. Hanlon stated that he discovered this oversight on August 1, and prepared a motion to file an answer out of time. However, he "could not complete [the motion] because [defendant] was traveling abroad." Mr. Hanlon added that plaintiffs' counsel received the answer that he submitted to the clerk and the interrogatories that he served. In addition, plaintiffs' attorney never informed Mr. Hanlon of the proof hearing.
The judge did not entertain argument on defendant's motion and entered an order on September 22, 2006, denying the motion. The judge noted on the order that, "Movant has not demonstrated excusable neglect." Defendant appeals and raises two arguments for our consideration: 1) the judge erred by denying the motion to vacate the default judgment; and 2) the judge erred by awarding counsel fees pursuant to N.J.S.A. 2A:42-10.10.
"Generally, a defendant seeking to reopen a default judgment must show that the neglect to answer was excusable under the circumstances and that he has a meritorious defense." Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff'd, 43 N.J. 508 (1964). "[T]he opening of default judgment should be viewed with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached." Id. at 319. "The decision whether to grant such a motion is left to the sound discretion of the trial court, and will not be disturbed absent an abuse of discretion." Mancini v. EDS, 132 N.J. 330, 334 (1993).
We are convinced that the judge erred by denying defendant's motion to vacate the default judgment. Clearly, Mr. Hanlon was careless by initially failing to make note of the due date for the answer, by filing the answer late, and by not acting promptly to file the answer out of time. Nevertheless, "[c]arelessness may be excusable when attributable to an honest mistake that is compatible with due diligence or reasonable prudence." Id. at 335. In our view, Mr. Hanlon's failure to file the answer when due, and his failure to promptly seek leave to file the answer out of time, were the result of honest mistakes.
Moreover, counsel's errors were compatible with due diligence. As the record shows, Mr. Hanlon did not simply ignore the matter. When Mr. Hanlon received the complaint, he contacted plaintiffs' attorney to ascertain the date for the filing of the answer. Mr. Hanlon prepared an answer and submitted it to the clerk two days after the due date. Mr. Hanlon was unable to finalize his motion to file the answer out of time because his client was traveling abroad. In addition, Mr. Hanlon propounded a set of interrogatories and served them on plaintiffs' attorney. Thus, Mr. Hanlon was diligently pursuing the matter, and his failure to file a timely answer was the result of excusable mistakes.
In addition to showing excusable neglect, defendant also presented sufficient facts to support a meritorious defense. Plaintiffs' claim is based upon N.J.S.A. 2A:42-10.10, which provides in pertinent part:
No landlord of premises or units to which this act is applicable shall serve a notice to quit upon any tenant or institute any action against a tenant to recover possession of premises, whether by summary dispossess proceedings, civil action for the possession of land, or otherwise:
a. As a reprisal for the tenant's efforts to secure or enforce any rights under the lease or contract, or under the laws of the State of New Jersey or its governmental subdivisions; or of the United States; or
b. As a reprisal for the tenant's good faith complaint to a governmental authority of the landlord's alleged violation of any health or safety law, regulation, code or ordinance, or State law or regulation which has as its objective the regulation of premises used for dwelling purposes; . . .
The statute additionally states:
Under subsection b of this section the tenant shall originally bring his good faith complaint to the attention of the landlord or his agent and give the landlord a reasonable time to correct the violation before complaining to a governmental authority.
A landlord shall be subject to a civil action by the tenant for damages and other appropriate relief, including injunctive and other equitable remedies, as may be determined by a court of competent jurisdiction in every case in which the landlord has violated the provisions of this section.
In the certification submitted in support of his motion to vacate the default judgment, defendant stated that the actions he took to terminate the tenancy were based upon his belief that Mr. Wozniak was not a person authorized to occupy the premises. Defendant says that there was no written lease for the premises. Ms. McGovern has apparently resided there for about twenty-five years.
Defendant stated that when he acquired the premises in 1994, it was his understanding that the premises had been leased to Ms. McGovern. He asserted that he owns approximately 700 apartments and he does "not monitor who goes in and out of them on a daily basis." Defendant said that he acted to seek plaintiffs' removal from the premises because Mr. Wozniak was not an authorized tenant, rather than in reprisal for any complaint that Ms. McGovern may have made about the premises or the actions she commenced in the municipal court. We are convinced that these assertions may, if accepted by the trier of fact, be considered a meritorious defense to plaintiffs' claim under N.J.S.A. 2A:42-10.10.
In addition, defendant argues that while the statute permits damages to be awarded, it does not expressly authorize the court to award attorney's fees. Here, the damages awarded by the court consisted of the counsel fees incurred for time devoted to responding to defendant's notice to cease; the second landlord/tenant case; and this matter.
Thus, assuming plaintiffs can establish that defendant issued the notice to cease and commenced the second landlord/tenant action in reprisal for the complaints made concerning the premises, there is a question as to whether the counsel fees incurred by plaintiffs in connection with those actions are "damages" under N.J.S.A. 2A:42-10.10. There also is a question of whether a court may award counsel fees incurred by plaintiffs in pursuing an action under N.J.S.A. 2A:42-10.10.
Reversed and remanded for further proceedings consistent with this opinion.
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